Ninth Circuit Leaves Determination of Arbitrability to the Arbiter in Oracle America v. Myrida Group

Thefacts of this case are complex and require an understanding of computing that I Iack, but what it seems to come down to is that Myriad Group (Myriad) hadsome licenses to use Java trademarks and the Java programming languagedeveloped by Oracle America (Oracle).  The parties dispute the terms ofthe licenses and as a result Oracle alleges that Myriad had been using thetrademarks and the programming language without paying for them, thusinfringing upon Oracle’s intellectual property rights.   Oracle sued inthe Northern District of California alleging breach of contract and violationof intellectual property rights, while Myriad sued Oracle in Delaware alleging breachof contract. 

Myriadmoved to compel arbitration in the Northern District of California pursuant toan arbitration clause that provided for arbitration of any claim relating tointellectual property rights “in accordance with the rules of the UnitedNations Commission on International Trade Law (UNCITRAL) (the ‘Rules’) in effect at the time of the arbitration as modified herein. . . ”  The District Court granted Myriad’s motion with respect toOracle’s breach of contract claim only, finding that the UNCITRAL Rules do not providethe arbitrator with exclusive jurisdiction to determine the scope of its ownjurisdiction.

OnJuly 26, 2013, the Ninth Circuit issued its opinion in Oracle America, Inc. v. Myriad Group A.G. andreversed the District Court’s partial grant of Myriad’s motion to compelarbitration.

The NinthCircuit began by noting that, while public policy favors arbitrationagreements, there is a presumption that courts should decide which issues arearbitrable.  Nonetheless, a court should grant a motion to compelarbitration to decide issues of arbitrability if the parties’ arbitrationprovision “constitutes clear and unmistakable evidence that the partiesintended to arbitrate arbitrability.” While the Ninth Circuit had never decided whether UNCITRAL’s Rulesconstitute such evidence, both the Second Circuit and the D.C. Circuit hadconcluded that the 1976 version of the UNCITRAL Rules constitutes clear andunmistakable evidence that the parties to an agreement governed by the Rules intended to arbitratequestions of arbitrability.  Although the2010 version of UNCITRAL’s Rules might have been at issue in this case, theNinth Circuit ruled the differences betwee the 1976 and 2010 versions do not affect the outcome on this issue. 

The Courtremanded the case to the District Court for proceedings consistent with itsopinon.

[JT]